ABSTRACT
The creation of the internal markets and the introduction of the euro were intended to foster the exchange of goods, services and inputs between the Member States (MS) of the European Union (EU). This chapter concentrates on the EU dairy market, and investigates whether an internal market with intense market integration for this produce exists. With a share of about 30 per cent on the world market, the EU is the most important exporter of dairy products. In milk equivalents, butter is the most important dairy product traded on the world market; the share of butter in total world trade of dairy products was about 50 per cent in the last decade and amounted to about 1m1 t. The main reason is that butter has a 'rest-utilization character' and production and prices depend to a large extent on the developments of the market for cheese, fresh milk products and whole milk powder, as well as the volume of subsidized exports.
